PeterUK_IHB
New member
What will happen if I go 100% s&p ? Today? I'm thinking of doing it just to see what will happen!
My 401k
- Thread starter AllisonC_IHB
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effenheimer_IHB
New member
<blockquote>What will happen if I go 100% s&p ? Today? I?m thinking of doing it just to see what will happen</blockquote>
The market will crash! Duh!
The market will crash! Duh!
ipoplaya_IHB
New member
[quote author="DeadbeatRoommate" date=1227233062]You might want to lobby your employer to add other types of investment options to the 401k offering list. The employer is generally the one who determines the mix for its employees.</blockquote>
Funny, I have never once had an employee suggest or lobby me to add anything to our 401k lineup. Usually, when I tweak the funds, we hold a conference call to discuss and 95% of the participants don't even bother to call-in to hear what's up.
Average Joe Investor doesn't give a rip about their 401k fund options and probably has no idea the difference between them. It's sad, because for many its their only savings and they pay less attention to it than they do rates on the passbook account.
Funny, I have never once had an employee suggest or lobby me to add anything to our 401k lineup. Usually, when I tweak the funds, we hold a conference call to discuss and 95% of the participants don't even bother to call-in to hear what's up.
Average Joe Investor doesn't give a rip about their 401k fund options and probably has no idea the difference between them. It's sad, because for many its their only savings and they pay less attention to it than they do rates on the passbook account.
O
Oscar_IHB
Guest
[quote author="effenheimer" date=1227234402]<blockquote>What will happen if I go 100% s&p ? Today? I?m thinking of doing it just to see what will happen</blockquote>
The market will crash! Duh!</blockquote>
Well that explains today's 11 year low then.
The market will crash! Duh!</blockquote>
Well that explains today's 11 year low then.
Corona Renter_IHB
New member
[quote author="Allison C." date=1226995901]I have already maxed out this year, hope it will catch up in less than 10 years. I was considering making some changes since 40% of it is in mutual funds. But I don't wanna sell low... Please Obama, Do Something Like You Promised! :long: :cheese:</blockquote>
He will-raise your taxes.
He will-raise your taxes.
jbenko_IHB
New member
[quote author="Corona Renter" date=1227253998][quote author="Allison C." date=1226995901]I have already maxed out this year, hope it will catch up in less than 10 years. I was considering making some changes since 40% of it is in mutual funds. But I don't wanna sell low... Please Obama, Do Something Like You Promised! :long: :cheese:</blockquote>
He will-raise your taxes.</blockquote>
Obama doesn't need to do anything till he takes office. Last I checked Bush is still in charge...where is Bush these days anyways or past 4 years? Isn't his job to re-assure things or give direction where we are going? Oh wait...he doesnt know where we are going...
He will-raise your taxes.</blockquote>
Obama doesn't need to do anything till he takes office. Last I checked Bush is still in charge...where is Bush these days anyways or past 4 years? Isn't his job to re-assure things or give direction where we are going? Oh wait...he doesnt know where we are going...
AllisonC_IHB
New member
[quote author="blackvault_cm" date=1227254724][quote author="Corona Renter" date=1227253998][quote author="Allison C." date=1226995901]I have already maxed out this year, hope it will catch up in less than 10 years. I was considering making some changes since 40% of it is in mutual funds. But I don't wanna sell low... Please Obama, Do Something Like You Promised! :long: :cheese:</blockquote>
He will-raise your taxes.</blockquote>
Obama doesn't need to do anything till he takes office. Last I checked Bush is still in charge...where is Bush these days anyways or past 4 years? Isn't his job to re-assure things or give direction where we are going? Oh wait...he doesnt know where we are going...</blockquote>
Is it just my imagination or does Bush seems "happier" these days that he'll be out of the office soon..... Just some of the footages I saw on TV....
He will-raise your taxes.</blockquote>
Obama doesn't need to do anything till he takes office. Last I checked Bush is still in charge...where is Bush these days anyways or past 4 years? Isn't his job to re-assure things or give direction where we are going? Oh wait...he doesnt know where we are going...</blockquote>
Is it just my imagination or does Bush seems "happier" these days that he'll be out of the office soon..... Just some of the footages I saw on TV....
biscuitninja_IHB
New member
I saw some summit footage and NOBODY shook his hand..... That was quite scary.
-bix
-bix
AllisonC_IHB
New member
[quote author="biscuitninja" date=1227255897]I saw some summit footage and NOBODY shook his hand..... That was quite scary.
-bix</blockquote>
oops!
-bix</blockquote>
oops!
Newport Trojan_IHB
New member
[quote author="DeadbeatRoommate" date=1227233062][quote author="Newport Trojan" date=1227071549]I shifted everything out of equity mutual funds in Jan and loss approximately 8%. I then moved it into what I thought was the safest thing...money market fund offered by Fidelity, but after reading this blog, Calc'd Risk, Naked Cap...I decided I didn't want to risk the buck being broken. I have currently allocated everything into Pimco Total Return Fund. I figure if you are going to bet, be on the side with the biggest pig at the trough. My 401K options are super limited from a non-equities offering, with just the 2 previous funds as the offering. I think we still have a ways to go as far as stocks getting to their bottom. I may start buying back once we get close to 7500 or in a few years...I figure I mitigated enough losses that I can time the market and still be ok if I am a little off.
Anyone know if I can contribute to my 401K but keep it in cash or is this a plan by plan detail?</blockquote>
Breaking the buck at Fidelity wouldn't have been as big of an issue if you had left the money in the money market fund through December 18.
http://personal.fidelity.com/produc...rticles/money-market-funds.shtml.cvsr?refhp=p
Some highlights from the link:
<em>Fidelity Investments and the Board of Trustees of Fidelity?s money market funds have determined that all of Fidelity?s retail and institutional money market mutual funds will participate in the U.S. Treasury Department Temporary Guarantee Program for Money Market Funds. The funds have entered into guarantee agreements with the Treasury Department that govern their participation in the program.
Under the program, the U.S. Treasury will guarantee the share price of any publicly offered eligible money market mutual fund that applies for and pays a fee to participate in the program. <strong>The coverage would apply only to investments held in participating money market funds as of the close of business on September 19, 2008.</strong>
Under the program, coverage is provided to shareholders for amounts that they held in participating money market funds as of the close of business on September 19, 2008. A shareholder?s holdings in a participating money market fund as of September 19, 2008, represent the maximum amount of assets eligible for reimbursement under the program. Any increase in the number of shares held in an account after the close of business on September 19, 2008, will not be guaranteed. If the number of shares held in the account fluctuates over the period, investors will be covered for either the number of shares held as of the close of business on September 19, 2008, or the current amount, whichever is less. If a shareholder closes his or her account, any future investment in the fund will not be guaranteed.
<strong>The guarantee will be triggered only if a participating fund liquidates its assets as a result of its net asset value falling below $0.995, commonly referred to as "breaking the buck". </strong>The Treasury Department states that, in the event that a participating fund breaks the buck and liquidates, a guarantee payment should be made to investors through their fund within approximately 30 days, subject to possible extensions at the discretion of the Treasury.
Fees paid to the Treasury Department to participate in the program will depend upon each fund?s net asset value (NAV) per share as of September 19, 2008.
The program is designed to address temporary dislocations in credit markets. <strong>It will exist for an initial three-month term and is scheduled to terminate on December 18, 2008</strong>, unless extended by the Secretary of the Treasury.
</em>
Alas, any money added to the money market fund after September 19th does not get the benefit of this temporary Treasury guarantee.
You might want to lobby your employer to add other types of investment options to the 401k offering list. The employer is generally the one who determines the mix for its employees.</blockquote> Too little too late on that. I was so pissed off when the GIVERNMENT stepped in to do this. I also didn't want to jeopardize any future contributions that may not have been covered. Unintended Consequences are all around us with this type of monkey business.
Anyone know if I can contribute to my 401K but keep it in cash or is this a plan by plan detail?</blockquote>
Breaking the buck at Fidelity wouldn't have been as big of an issue if you had left the money in the money market fund through December 18.
http://personal.fidelity.com/produc...rticles/money-market-funds.shtml.cvsr?refhp=p
Some highlights from the link:
<em>Fidelity Investments and the Board of Trustees of Fidelity?s money market funds have determined that all of Fidelity?s retail and institutional money market mutual funds will participate in the U.S. Treasury Department Temporary Guarantee Program for Money Market Funds. The funds have entered into guarantee agreements with the Treasury Department that govern their participation in the program.
Under the program, the U.S. Treasury will guarantee the share price of any publicly offered eligible money market mutual fund that applies for and pays a fee to participate in the program. <strong>The coverage would apply only to investments held in participating money market funds as of the close of business on September 19, 2008.</strong>
Under the program, coverage is provided to shareholders for amounts that they held in participating money market funds as of the close of business on September 19, 2008. A shareholder?s holdings in a participating money market fund as of September 19, 2008, represent the maximum amount of assets eligible for reimbursement under the program. Any increase in the number of shares held in an account after the close of business on September 19, 2008, will not be guaranteed. If the number of shares held in the account fluctuates over the period, investors will be covered for either the number of shares held as of the close of business on September 19, 2008, or the current amount, whichever is less. If a shareholder closes his or her account, any future investment in the fund will not be guaranteed.
<strong>The guarantee will be triggered only if a participating fund liquidates its assets as a result of its net asset value falling below $0.995, commonly referred to as "breaking the buck". </strong>The Treasury Department states that, in the event that a participating fund breaks the buck and liquidates, a guarantee payment should be made to investors through their fund within approximately 30 days, subject to possible extensions at the discretion of the Treasury.
Fees paid to the Treasury Department to participate in the program will depend upon each fund?s net asset value (NAV) per share as of September 19, 2008.
The program is designed to address temporary dislocations in credit markets. <strong>It will exist for an initial three-month term and is scheduled to terminate on December 18, 2008</strong>, unless extended by the Secretary of the Treasury.
</em>
Alas, any money added to the money market fund after September 19th does not get the benefit of this temporary Treasury guarantee.
You might want to lobby your employer to add other types of investment options to the 401k offering list. The employer is generally the one who determines the mix for its employees.</blockquote> Too little too late on that. I was so pissed off when the GIVERNMENT stepped in to do this. I also didn't want to jeopardize any future contributions that may not have been covered. Unintended Consequences are all around us with this type of monkey business.
Gohabsgo_IHB
New member
[quote author="blackvault_cm" date=1227157891]<blockquote>black_vault, but no everybody is as smart as you when it comes to investing. You can shift all your money into cash. Here is a good argument for 401K, you can defer a lot of money pretax. It's like $15K for under 50 and $20K for over 50. That is a lot of money. You can also convert it to rollover IRA, add your kid and pass it as an inheritance.
<a href="http://www.teplg.com/index.php?option=com_content&task=view&id=32&Itemid=48">http://www.teplg.com/index.php?option=com_content&task=view&id=32&Itemid=48</a></blockquote>
I know the benefits. However, what good is deferring your taxes when you just lost 50% of your investment. I mean its one thing to "save" 33% cents on a dollar through taxes via your contributions, however when you lose 40% of your investments...I just don't see the point. Plus how many contribute to their 401Ks and then change jobs a year, two or three into it. They lose the employer contribution completely or some of it.
I mean its better than nothing, I won't argue that. However, I just like the flexibility of being able to do with it as I please. I like being able to make money both ways, and create strategies that are pretty bulletproof in a collapsing economy.
For example the market went down another 400pts today roughly 5%. I gained 0.68% on my portfolio. I started accumulating shares of various companies, however they got beat up today. I did write covered calls on them and I still have puts protecting myself so I'm virtualy in a neutral position with a slight bias towards the downside.
I guess I just can't fathom the thought of having a million bucks and losing 40% of it in a matter of a couple of months and on top of it still having the lack of visibility of where we are going next. Do I lose 80% when its all said and done?
Plus, I believe we are going to enter a period where the market stays dead flat. 10 years in the future, DOW could be at 9K. With inflation adjusted...you are screwed. With your own account you can at least write covered calls and collect a monthly premium in a dead market.
I still get what you are saying that not everybody knows how to do all that. But my excuse is that if you truly care about your money and have a fair amount in the market it is your duty to understand the basics. Writing covered calls isn't rocket science. If you need help, PM me and for a few bucks I'll do it for you if you don't care to do it yourself.
DOW can fall 5000 pts tomorrow and I will sleep peacefully just like the night before.</blockquote>
CV, I think you are missing the point here.
What you are doing is pretty much the same as being in fixed income which is available for all 401(k).
Also, 99% of the population don't have a clue about the stock market and even if they spent hours and hours reading about investment strategies, they just couldn't do it.
Fund managers are not as bad as you are saying, they have an investment objective, you can tract their 1, 3, 5, and 10 year record and they disclose their fees. It's no worse than mutual funds.
<a href="http://www.teplg.com/index.php?option=com_content&task=view&id=32&Itemid=48">http://www.teplg.com/index.php?option=com_content&task=view&id=32&Itemid=48</a></blockquote>
I know the benefits. However, what good is deferring your taxes when you just lost 50% of your investment. I mean its one thing to "save" 33% cents on a dollar through taxes via your contributions, however when you lose 40% of your investments...I just don't see the point. Plus how many contribute to their 401Ks and then change jobs a year, two or three into it. They lose the employer contribution completely or some of it.
I mean its better than nothing, I won't argue that. However, I just like the flexibility of being able to do with it as I please. I like being able to make money both ways, and create strategies that are pretty bulletproof in a collapsing economy.
For example the market went down another 400pts today roughly 5%. I gained 0.68% on my portfolio. I started accumulating shares of various companies, however they got beat up today. I did write covered calls on them and I still have puts protecting myself so I'm virtualy in a neutral position with a slight bias towards the downside.
I guess I just can't fathom the thought of having a million bucks and losing 40% of it in a matter of a couple of months and on top of it still having the lack of visibility of where we are going next. Do I lose 80% when its all said and done?
Plus, I believe we are going to enter a period where the market stays dead flat. 10 years in the future, DOW could be at 9K. With inflation adjusted...you are screwed. With your own account you can at least write covered calls and collect a monthly premium in a dead market.
I still get what you are saying that not everybody knows how to do all that. But my excuse is that if you truly care about your money and have a fair amount in the market it is your duty to understand the basics. Writing covered calls isn't rocket science. If you need help, PM me and for a few bucks I'll do it for you if you don't care to do it yourself.
DOW can fall 5000 pts tomorrow and I will sleep peacefully just like the night before.</blockquote>
CV, I think you are missing the point here.
What you are doing is pretty much the same as being in fixed income which is available for all 401(k).
Also, 99% of the population don't have a clue about the stock market and even if they spent hours and hours reading about investment strategies, they just couldn't do it.
Fund managers are not as bad as you are saying, they have an investment objective, you can tract their 1, 3, 5, and 10 year record and they disclose their fees. It's no worse than mutual funds.
Gohabsgo_IHB
New member
[quote author="momopi" date=1227230712]I didn't have the smarts to move all my funds to cash in Jan 2008. Currently I'm down 48%.
But I know not to "buy high, sell low", so am not going to cry over it too much and just let it be. I'm not going to retire for another 30+ years anyway, so why fret over 1 down cycle.
It was my choice to allocate 95% to equity funds and 5% to bonds. So I can only look at the mirror to point fingers.
I'm familiar with Taylor Larimore's 4-fund portfolio concept, and choose not to use it. If I had used the 4-fund strategy, I'd only be down 24% instead of 48%:
<a href="http://socialize.morningstar.com/NewSocialize/forums/1/128297/ShowThread.aspx">http://socialize.morningstar.com/NewSocialize/forums/1/128297/ShowThread.aspx</a>
THE 4-FUND PORTFOLIO: (25% each)
A Money-Market Fund
Total Stock Market Fund
Total International Fund
Total Bond Market Fund
FOR MAXIMUM TAX-EFFICIENCY:
Fill-up your taxable account in the order shown. Put what's left into your tax-deferred account(s).
THE ADVANTAGES:
Maximum Diversification (low risk)
Zero overlap
No manager changes
No style drift (from benchmark index)
Desired stock/bond/cash allocation is easy.
Never a need to rebalance within asset classes
High probablity of beating most funds
Never below index performance
Minimum maintenance
Lowest possible cost
Low taxes
Simplicity.
ADDENDUM:
1. High-income investors should substitute a tax-exempt bond fund for Total Bond Market Index Fund and use a Tax-Exempt Money Market Fund.
2. Larger portfolios may benefit from adding TIPS, REIT, or Small-Cap Value in tax-deferred acounts.
---------------------------------------------------
These two links explain the sophisticated logic of the 4-fund portfolio (recommended by Mr. Bogle):
<a href="http://www.stanford.edu/~wfsharpe/art/active/active.htm">1. The Arithmetic of Active Management by Nobel Laurete William Sharpe</a>
<a href="http://homepage.mac.com/j.norstad/finance/total.html">2. Investing in Total Markets</a>
========================
Vanguard Fund & YTD returns
Prime Money Market: +2.48%
Total Bond Market Index: +0.30%
Total Stock Market Index: -44.64%
Total International Stock Index: -53.29%
Account average: -23.7875%</blockquote>
But your returns were probably higher last year and the years before. If you took more risk, you probably had better return. If you horizon is 30 years, go all-in and start pulling this off when you get closer to retirement. I'll let you decide what "closer" is as this definition varies for everyone. One might say 10 years and other says 10...it all depends of you tastes.
But I know not to "buy high, sell low", so am not going to cry over it too much and just let it be. I'm not going to retire for another 30+ years anyway, so why fret over 1 down cycle.
It was my choice to allocate 95% to equity funds and 5% to bonds. So I can only look at the mirror to point fingers.
I'm familiar with Taylor Larimore's 4-fund portfolio concept, and choose not to use it. If I had used the 4-fund strategy, I'd only be down 24% instead of 48%:
<a href="http://socialize.morningstar.com/NewSocialize/forums/1/128297/ShowThread.aspx">http://socialize.morningstar.com/NewSocialize/forums/1/128297/ShowThread.aspx</a>
THE 4-FUND PORTFOLIO: (25% each)
A Money-Market Fund
Total Stock Market Fund
Total International Fund
Total Bond Market Fund
FOR MAXIMUM TAX-EFFICIENCY:
Fill-up your taxable account in the order shown. Put what's left into your tax-deferred account(s).
THE ADVANTAGES:
Maximum Diversification (low risk)
Zero overlap
No manager changes
No style drift (from benchmark index)
Desired stock/bond/cash allocation is easy.
Never a need to rebalance within asset classes
High probablity of beating most funds
Never below index performance
Minimum maintenance
Lowest possible cost
Low taxes
Simplicity.
ADDENDUM:
1. High-income investors should substitute a tax-exempt bond fund for Total Bond Market Index Fund and use a Tax-Exempt Money Market Fund.
2. Larger portfolios may benefit from adding TIPS, REIT, or Small-Cap Value in tax-deferred acounts.
---------------------------------------------------
These two links explain the sophisticated logic of the 4-fund portfolio (recommended by Mr. Bogle):
<a href="http://www.stanford.edu/~wfsharpe/art/active/active.htm">1. The Arithmetic of Active Management by Nobel Laurete William Sharpe</a>
<a href="http://homepage.mac.com/j.norstad/finance/total.html">2. Investing in Total Markets</a>
========================
Vanguard Fund & YTD returns
Prime Money Market: +2.48%
Total Bond Market Index: +0.30%
Total Stock Market Index: -44.64%
Total International Stock Index: -53.29%
Account average: -23.7875%</blockquote>
But your returns were probably higher last year and the years before. If you took more risk, you probably had better return. If you horizon is 30 years, go all-in and start pulling this off when you get closer to retirement. I'll let you decide what "closer" is as this definition varies for everyone. One might say 10 years and other says 10...it all depends of you tastes.